[{"bbox": [96, 153, 1135, 312], "category": "Text", "text": "The scaling up of the PREI needs to reflect the priority options of the new Government. It should prioritise between aiming at horizontal expansion, reaching a country-wide coverage, or at vertical expansion, covering new sectors and layers of the economy beyond markets and street vendors. Recently, other professional sectors including the taxi drivers, requested to be part of the formalisation campaigns. If the Government succeeds in addressing these demands, the formalisation can be an opportunity to, not only brining in additional resources, but also meeting the demands of a discontent population and contributing to stabilise the country."}, {"bbox": [96, 323, 1135, 483], "category": "Text", "text": "To retain workers and firms, and to regularise their contributions to the AGT and the INSS, it is essential that formality is more attractive for the small economic operators, including MSMEs, rather than informality. The PREI should create a substantial package of incentives, which stem from immediate social benefits and protection (i.e. maternity allowances; family bonus), social security, access to public services, access to financial inclusion in terms of banking, mobile money and microcredits, and some educational and vocational trainings and safety and stability regarding their economic activity."}, {"bbox": [96, 494, 1135, 629], "category": "Text", "text": "The success of the formalisation will be, in the long run, contingent to structural dimensions that are planned to be addressed by the Government in the years to come: the existence of an inclusive business environment, the functioning of the state institution and rule of law, the effectiveness of the public services, a transparent and efficient PFM, an affective resources mobilisation and public resources allocation, the economic diversification and independence of the state budget on just one commodity, and decentralisation policies."}, {"bbox": [96, 639, 1135, 721], "category": "Text", "text": "The Government established the OEI, a consultative body entitled to structure and maintain a social dialogue with the stakeholders of the formalisation. To start addressing these underlying challenges, the OEI may promote an inclusive, comprehensive and strengthened social policy dialogue on the required medium-term structural reforms."}, {"bbox": [96, 732, 1135, 892], "category": "Text", "text": "There is a need of reconciliation between the financial resources and the budgetary allocation. In 2021, the funds from the EU Budget Support 2020-2022 were allocated to PREI via an additional credit - approved by executive decree - ad not in the Budget³⁹. In 2022, only a small portion of the EU's financial injection was reflected in the Budget. In the years to come, and in line with the MINFIN's aspiration to produce a programme budgeting and the Mid-term Expenditure Framework, the PREI should be reflected in the budget allocations of the different institutions involved. The costing of the PREI, expected in the context of this Action, is key to this achievement."}, {"bbox": [96, 903, 1135, 1009], "category": "Text", "text": "In line with the decentralisation ambition, the PREI may need to define the role of the municipal administrations. Should the aim be to convert the campaigns into a permanent service, the natural set up for the services would be at the municipal level, closer to the centres of informality, avoiding high transactions costs and offering proximity services tailored to the needs of the citizens."}, {"bbox": [96, 1020, 1135, 1130], "category": "Text", "text": "Adherence to the INSS in the framework of the PREI remains low, despite the creation of a new and tailored contributory regime for low-income self-employed⁴⁰, which allows for a substantial reduction in the insurers' contributions (4% of their income, against 11%). Indeed the social benefits associated to this regime (pensions and death subsidy) seems not to be attractive enough for informal operators."}, {"bbox": [96, 1141, 1135, 1247], "category": "Text", "text": "The INSS is looking at increasing its coverage (40% of the Economically Active Population by 2027, form 11.9% in 2022⁴¹) and the benefits associated to the contributory regimes⁴². As part of the Action, the INSS agreed to conduct an actuarial diagnosis, which will present policy recommendation to expand the social benefits to workers who transit from informality and adhere to the new regime."}, {"bbox": [96, 1258, 1135, 1445], "category": "Text", "text": "The financial inclusion aspect needs to be strengthened. Access to microcredits has been hampered by high interest rates and lack of suitable public-private initiatives which may offer better conditions than the banking market. The Government's allocation of 7,200 million Kwanzas from the Agricultural Development Support Fund (FADA, Fundo de Apoio ao Desenvolvimento Agrário) to the PREI, to provide microcredits at a very low interest rate⁴³, reflects the political will in improving the conditions for low-income economic operators to get access to micro-finance. However, for the programme to be sustainable, long-term agreements between the private and the public sector needs to be achieved. The PREI will look on how to adapt micro-credit volume and conditions, but also"}, {"bbox": [86, 1536, 913, 1559], "category": "Footnote", "text": "³⁹ This is because the funds were transferred from the EU to the Treasury once the Budget had been approved."}, {"bbox": [86, 1558, 1016, 1581], "category": "Footnote", "text": "⁴⁰ Executive Decree 97/22 of 2 May, which set up the contributory social protection regime for low-income self-employees"}, {"bbox": [86, 1580, 570, 1603], "category": "Footnote", "text": "⁴¹ In January 2022, 2.141.013 persons were insured by the INSS."}, {"bbox": [86, 1602, 390, 1625], "category": "Footnote", "text": "⁴² INSS Development Plan Angola 2030"}, {"bbox": [86, 1624, 303, 1645], "category": "Footnote", "text": "⁴³ At 3% annual interest rate."}, {"bbox": [1028, 1681, 1143, 1705], "category": "Page-footer", "text": "Page 12 of 33"}]